Both statutes are in force, and both exempt a resale by the outgoing franchisee from the disclosure document on four cumulative conditions. New Brunswick puts them in section 5(8)(a) of the Franchises Act, RSNB 2014, c. 111; Prince Edward Island puts the identical four in section 5(7)(a) of its Franchises Act, RSPEI 1988, c. F-14.1. Miss one and the buyer has two years to rescind.
Key takeaways
SECTION 01 OF 09
Yes, though the dates are not obvious. New Brunswick’s statute began as SNB 2007, c. F-23.5, which laws.gnb.ca still serves marked repealed. The operative text is the Franchises Act, RSNB 2014, c. 111, whose closing note records that it was “proclaimed and came into force February 9, 2015”.
The substance is older than the chapter number suggests. Section 2 reaches “a franchise agreement entered into on or after February 1, 2011” — the date the 2007 Act was proclaimed. The 2014 revision renumbered the Act without restarting its clock.
PEI is the one people get wrong, because its Act commenced in two pieces. The province’s Table of Public Acts, updated 1 August 2026, records “s.1-4, 8, 9(1),(2), 10-15 - [proc] July 1/06” and then “s.5-7, 9(3) - [proc] Jan. 1/07”. Disclosure, rescission and damages bound Island franchises only from 1 January 2007.
SECTION 02 OF 09
Neither Act asks a selling franchisee for a disclosure document if four things hold at once. New Brunswick’s section 5(8) exempts “the grant of a franchise by a franchisee if” its four subparagraphs are met; PEI’s section 5(7)(a) uses the same words and the same four. One failure and all of section 5 applies.
Three are usually easy. The seller must not be “the franchisor, the franchisor’s associate or a director, officer or employee of the franchisor or of the franchisor’s associate”; the grant must be “for the franchisee’s own account”; and with a master franchise, “the entire franchise is granted”.
The fourth is where resales fail: “the grant of the franchise is not effected by or through the franchisor”. Selling the company rather than the outlet does not avoid it, because in New Brunswick’s section 1(1) and PEI’s section 1(1)(i) an interest in a franchise “includes the ownership of shares in the corporation that owns the franchise”.
SECTION 03 OF 09
Both statutes answer that, narrowly. New Brunswick’s section 5(10) and PEI’s section 5(8) each provide that “a grant is not effected by or through a franchisor merely because” one of exactly two things is true. There is no third.
The first is “the franchisor has a right, exercisable on reasonable grounds, to approve or disapprove the grant”. The second is that “a fee must be paid to the franchisor in an amount set out in the franchise agreement or in an amount that does not exceed the reasonable actual costs incurred by the franchisor to process the grant”.
That second limb reads wider in the Maritimes than in Ontario, by one word. The Arthur Wishart Act protects only “a transfer fee must be paid to the franchisor in an amount set out in the franchise agreement”; New Brunswick and PEI say “a fee”. No decision relied on here settles what that difference does.
SECTION 04 OF 09
Both Acts run the same nine-paragraph list, and it is not Ontario’s. Paragraph (b) covers a grant to someone who “has been an officer or director of the franchisor or of the franchisor’s associate for at least six months immediately before the grant of the franchise”, matched word for word in PEI. Ontario also requires the person to hold the office currently or to have left it within four months.
Paragraph (e) is fixed in the statute rather than left to a regulation: an in-store franchise is exempt where its sales will not exceed 20 per cent “of the total sales of the business during the first year of operation of the franchise”. Ontario prescribes that percentage by regulation.
The money threshold is the trap. Paragraph (g) exempts a grant where the franchisee’s “total annual investment to acquire and operate the franchise” does not exceed the prescribed amount — $5,000 in both provinces, per section 10 of New Brunswick’s Disclosure Document Regulation and section 7 of PEI’s regulations. Neither has anything like Ontario’s large-investment exemption at the other end.
SECTION 05 OF 09
Both Acts put it on the party relying on it. Section 13 of the New Brunswick Act and section 13 of the PEI Act are word for word: “the burden of proving an exemption or an exclusion from a requirement or provision is on the person claiming it”.
A closing file silent on the disclosure question is therefore not neutral. Two years on, the seller must establish from records nobody kept that the franchisor did not effect the grant and that the sale was for the seller’s own account. A memorandum signed on closing, naming the paragraph relied on and why, is the entire evidentiary record.
Nor can it be contracted away: section 12 of each Act voids a purported waiver by a franchisee of a right conferred by the Act. Treadstone Law’s New Brunswick resale page puts the practical version — “whether disclosure is required on a resale is a question that gets confirmed early, never assumed” — though it names no chapter or subsection.
SECTION 06 OF 09
The windows are identical in both provinces and run on different triggers. Under section 6(1) of each Act a franchisee may rescind “no later than 60 days after receiving the disclosure document” where it was late or deficient, and under section 6(2) “no later than two years after entering into the franchise agreement if the franchisor never provided the disclosure document”.
PEI then adds a saving provision New Brunswick lacks. Section 3(3) of the PEI regulations provides that “A disclosure document is properly given for the purposes of section 6 of the Act if the document is substantially complete”. That phrase appears nowhere in New Brunswick’s Disclosure Document Regulation or in the New Brunswick Act.
Delivery is prescribed differently too, and the 14-day clock runs from receipt. New Brunswick prescribes “delivery by prepaid courier”; PEI prescribes “delivery by courier, if a written acknowledgment of receipt is received from the prospective franchisee”. On an Island deal the waybill alone is not the prescribed method.
SECTION 07 OF 09
Rescission is an unwind, not a damages award. Section 6(6) of the New Brunswick Act and of the PEI Act each require the franchisor, within 60 days of the effective date, to refund money received, buy back inventory, supplies and equipment at the price the franchisee paid, and “compensate the franchisee for the losses that the franchisee incurred in acquiring, setting up and operating the franchise”.
The buyer’s claim runs against the franchisor, not the seller — but a franchisor made to buy back a business eighteen months later will look hard at who told it the exemption applied.
The damages section differs by three words. PEI’s section 7(1) gives an action where loss follows “as a result of the franchisor’s failure to comply in any way with section 5”; New Brunswick’s reads “as a result of the franchisor’s failure to comply with section 5”.
SECTION 08 OF 09
This is the largest difference between the two regimes, and Ontario has no analogue — a case-insensitive search of the whole consolidated Arthur Wishart Act returns no occurrence of “mediat”. Section 8 of the New Brunswick Act lets any party deliver a notice of dispute, after which “Within 15 days after delivery of the notice of dispute, the parties to the dispute shall attempt to resolve the dispute”.
The timetable then hardens. Under the Mediation Regulation a party who thinks the dispute unsuitable has “within 7 days after that notice is delivered” to serve a notice declining mediation; otherwise the parties must appoint a mediator “if there are 4 or fewer parties, within 14 days after the notice to mediate was delivered”, and “Mediation of the dispute must begin within 45 days after a mediator is appointed under section 5”.
PEI’s section 8 is a different animal — a power for the Minister to “exempt the franchisor from the requirement to include prescribed financial statements in a disclosure document”, on a fee set at $250. A seller deadlocked with a franchisor over consent has a statutory lever in Moncton and none in Charlottetown.
SECTION 09 OF 09
The Crown is treated oppositely. New Brunswick’s section 2(1) says “This Act binds the Crown”; PEI’s section 2(4) says “This Act does not bind the Crown”, and its section 2(3)(h) also carves out “a service contract or franchise-like arrangement with the Crown or an agent of the Crown”.
The buyer’s reference list is drawn from different maps. New Brunswick’s regulation tops up a short list of current franchisees from “Ontario, Quebec, Prince Edward Island, Nova Scotia or the State of Maine”; PEI’s turns to the “franchisees that operate franchises that are geographically closest to Prince Edward Island”.
So settle in writing which paragraph you rely on, and disclose where there is real doubt: a needless disclosure costs a fortnight, a missing one stays live for two years. Our companion article covers Ontario and Alberta; Treadstone Law’s resale guide is Ontario law and names neither province. Its PEI page expects a resale “to be relieved from a fresh disclosure document where there's no material change to the franchise and the buyer receives copies of the existing agreement” — but material change is the test in clauses (c) and (f), not clause (a).
No. Both Acts define an interest in a franchise to include ownership of shares in the corporation that owns the franchise, so selling shares rather than the outlet still has to satisfy the same four cumulative conditions — most importantly, that the grant is not effected by or through the franchisor.
The full disclosure obligations under section 5 apply to the resale, and the buyer gets a real remedy for it: under section 6(2) they may rescind up to two years after entering the franchise agreement if no disclosure document was ever provided.
No, only in New Brunswick. Section 8 of New Brunswick’s Franchises Act lets any party deliver a notice of dispute, triggering fixed mediation deadlines under the Mediation Regulation. PEI’s section 8 is a different mechanism entirely — a ministerial power to exempt a franchisor from including prescribed financial statements in a disclosure document.
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